Xbox Series S's Price Puts Sony And PS5 In A Difficult Position

Sony has announced a PS5 showcase event will take place today, September 16. The company hasn't confirmed what the event will cover other than PlayStation 5 games, but with preorders for the next-gen Xbox opening soon, it's widely speculated that this time we might finally get a PS5 release date and price. Given the similarities in power between the two systems, that could make the announcement very interesting. Read on for a look at why Sony has been backed into a bit of a corner when it comes to price, and be sure to also check out our take on why the DualSense controller might be expensive. You can also find out why Microsoft chose to price the Xbox Series X/S so aggressively.

Following its reveal of the Xbox Series X last December, Microsoft finally revealed its other next-generation console, the Xbox Series S. It's a new approach to the launch of a new console generation, where both the premium and more affordable versions of the same platform are available from day one. Coming off a generation with half-step iterations--the Xbox One X and the PS4 Pro--it's clear that Microsoft wants to give everyone some way to get in on its latest hardware. Which leaves Sony in a precarious position.

Sony has already revealed its hand with its own two versions of the PlayStation 5, albeit with a different philosophy in mind. Instead of providing two consoles that differ in terms of performance, Sony is simply giving customers the choice between having a disc drive or going all-in on digital purchases. The underlying hardware in both is identical, which suggests that their prices aren't going to differ by much. At least, not to the degree at which Microsoft has positioned its Xbox Series X and Series S, which will retail for $500 and $300 respectively.

The Xbox Series S presents a potentially difficult marketing hurdle for Sony to overcome. At $300, it's priced way too low for the more powerful, and more expensive to manufacture, PS5 to compete with, yet the existence of two versions of the PS5 immediately lends itself to the idea that it can. For those who understand the architectural differences between the two, this is a moot point. But for most customers who simply see two Xbox consoles and two PS5 consoles, understanding why they don't trade blows at the same two price points could be very confusing. It's evident already over social media, with numerous suggestions that the PS5 Digital edition should be priced to match the Series S. It's just not feasible for Sony to make that move, never mind possible with the hardware it's touting.

It's not just at the cheaper end that Sony potentially faces issues though. The Xbox Series X coming in at $500 is a big deal, considering how much of Microsoft's marketing has boasted about it being the most powerful next-generation console on the market. That's true on paper, and Sony certainly understands how that is only one facet of a successful console, but it's a crucial component at launch. In 2013, the PS4 was not only the more powerful console when compared to the Xbox One, but it was also the cheaper one. Back then Sony hadn't established as much goodwill as it did across this generation with regards to stellar first-party titles, and yet it didn't matter. It was enough for Sony to get the head start it needed, which might be exactly what Microsoft is looking to do here.

Gaining that initial lead doesn't mean it will always carry through (the resurgence of the PS3 late into its cycle shows how a band launch can be turned around), but it establishes a trend that is difficult to break. There's a snowball effect associated with early adoption, where friends and communities will gravitate to the more popular platform for multiplayer games. The rise of cross-platform multiplayer has potentially mitigated this to a degree, and serious multiplayer communities will always follow the platform that is supported for official competitions. But there's a desire from either side to get out of the gates strong, using it as a platform to securely expand rather than claw back favor.

At $500, the Xbox Series X has the potential to force a reaction from Sony. There's no definitive way of knowing yet if this is the price it had already settled on internally, but it hasn't been too long since reports circulated suggesting the company was having trouble keeping production costs at low as Microsoft's retail price for its console. Consoles also haven't been sold at a loss for a long time, but if there was one company in this race with the financial stability to support it, it's Microsoft.

Xbox is not Microsoft's money-maker in the way that Sony depends on the PlayStation brand, so it might not be in its power to adjust accordingly if its goal is to match Microsoft on price. There might be enough room for Sony to launch the digital-only PS5 at the same price as the Xbox Series X if production costs are still a concern, but it's difficult to see it using that version to go significantly lower.

Unless something drastic has changed since reporting on its production and Sony has found a way to significantly reduce costs, it's likely that in the best-case scenario the PS5 will retail for the same as the Xbox Series X. Whether it's the more expensive disc-based version or the digital one that matches it is another question, but irrespective it has no real answer to the budget-focused Series S. With that in mind, it must be a top priority at Sony for the PS5 to get as close to the Xbox Series X price as possible, or risk being the most expensive console period this holiday season.